Bruno MeessenIn this blog, Bruno Meessen argues that the ‘value for money’ agenda is also an African one. A key test for Performance-Based Aid schemes will be the extent to which they consolidate reform initiatives already taken at country level.

Over the last 15 days, we have had the opportunity to read two interesting contributions on the progressive shift of the aid agenda towards ‘results for money’.Let’s start with the most recent one. On the Broker Online blog, Marcus Leroy, a former technical assistant for the Belgian Cooperation, criticizes the increasing dominance of the “results for money” agenda (and more specifically performance-based aid) in the aid industry.Leroy’s review of the ‘value for money’ agenda is rich. He first discusses it at a conceptual level and then at the operational level. In this post, I would like to focus on a few points related to the facts (the philosophical and moral issues he identifies I will leave for another blog…). And obviously, given my background, I will stick to the health sector. First of all, let me be clear that I agree with Mr Leroy on this important point: performance-based aid (PBA) is not without risks. He identifies several of them, some of which were discussed at our last Incentives for Health Provider Performance Network event in May at CERDI in Clermont-Ferrand, France. Presentations there gave us a better understanding of the proposals on the table: some are well advanced (such as the GAVI one), some - maybe the most radical ones -, such as COD Aid or TrAid+ are still under development. All were really interesting. However, the half-day of exchanges also made us realize that PBA will not be the magic bullet that (part of) the aid sector has been in search of for decades. Facing the unknown, it’s only natural to feel some fear. PBA is no exception - many of us have fears about the approach. My main concern is that donors will opt for narrow targets within one sector, resulting in few positive spill-over effects across sectors and the whole local society. Worse, an incentive scheme focusing on just one health problem could have major distortionary effects for the sector overall. I understand that experts in the USA and in Europe are working hard on these issues at this very moment. We heard at a recent aid agency meeting that DfID is making progress in the development of its performance-based aid instrument. We sincerely wish them success. Three points of criticismI do not, of course, agree with everything Leroy states in his piece. More specifically, as far the health sector is concerned, I would like to raise three key issues.First, I think it’s important to make the distinction between performance-based aid and performance-based financing (PBF) at the country level. PBA entails a contract between a donor and a recipient country. PBF, on the other hand, is about institutional arrangements (and involves thus much more than just a contract!) mainly between a central government (for example the Ministry of Health) and health care facilities. Some commentators confound the two strategies. That’s a mistake.I would encourage Mr Leroy to read up on recent PBF experiences in the health sector. He will notice that a whole community of experts and actors is increasingly involved in this approach, and that PBF typically entails broad institutional changes, with a view to the long term. We invite him to visit the health sector in Rwanda for example, or Burundi, where he will see first hand how transformative PBF can be. He will also see how PBF can put pressure on donors to harmonize their interventions and can increase government ownership (if donors are willing to comply with the Paris Declaration, which is of course not always the case).Secondly, let’s not discard the New Public Management agenda so easily (as Leroy seems to do). Many low-income countries do need such reforms for their public sector. As with any reformist agenda, mistakes have certainly been made and will be made again. But it is not because, let’s say, the financial incentive scheme set up by Sarkozy for the French police is controversial that health care facilities in sub-Saharan Africa shouldn’t be remunerated according to the services (both in terms of quantity and quality) they provide to society. Evidence (or opinions) gathered in other sectors, in other times and in totally different settings do not naturally hold in other circumstances. This brings me straight to my third point of criticism – which I see as most important. It is a huge mistake to see the agenda of ‘results for money’ as being predominantly driven by the North and the “usual donor suspects”. Just read the viewpoint of Donald Kaberuka, President of the African Development Bank and former Minister of Finance of Rwanda, published two weeks ago in The Lancet. Some of you may not know Mr Kaberuka; he is arguably one of the most active and committed reformers in Africa today. The major progress achieved in Rwanda over the last decade is not only a story of political leadership at the highest level, but also one of getting reforms ‘technically’ right. While Paul Kagame has been a key figure, a lot of the progress in Rwanda has come about because of the commitment of a whole generation of dedicated and visionary Rwandan technicians. Some are still in the country; others, like Mr. Kaberuka, are now sharing their experience and vision at the regional level. As you might expect from somebody in his position, Mr. Kaberuka’s paper is short and focused. The main message is straightforward: thanks to economic growth, African countries can expect to have more and more domestic resources in the near future. What they need most now is accountability. While the author displays a broad understanding of the concept (including democracy) in his paper, he also emphasizes what accountability means from a public finance perspective: public money bringing more benefits to citizens. Mr. Kaberuka’s track record and his paper give a clear indication of the policy he has in mind, and PBF is part of the package.Is this just the vision of a successful ex-Minister of Finance, one might wonder? At a workshop organized by the World Bank in Limbe (Cameroun) two weeks ago on PBF in the health sector, I took note – again – of how important this agenda of greater accountability is for many senior African officials and technicians (although the sample was of course biased). My point is this - the accountability agenda formulated so eloquently by Mr. Kaberuka and others is not something imposed from outside. A double proposalIn conclusion, PBA is high on the agenda in the North, and will likely remain so in the coming years. Some Western aid experts are voicing concerns. In his post, Mr. Leroy rightly raises the question of the ‘agency’ of the party under contract. Will PBA fully respect the sovereignty of the recipient country, or will it be yet another tool for donors to impose their own objectives and preferences? I may be naïve, but my guess is that the donors testing out this strategy will aim for a fair and balanced negotiation with the recipient country. But will this be enough to diminish the deep distrust that some stakeholders have developed toward bilateral aid agencies? I have two constructive proposals for donors working with PBA.First, it is critical to get recipient countries’ perspective on PBA. It would be great if the consultation was transparent (maybe it is in some places, but I am not aware of it). Why not organize some rounds of structured discussions with a few parliaments in the South? As we are reminded by Kaberuka and Leroy, accountability should be directed first of all towards citizens of the recipient countries. I hope that PBA can perform better than existing aid instruments in this respect. If such a stakeholder consultation process is not possible, another option would be to suggest the PBA strategy first to Rwanda. After the summit in Busan, we know that this would be a sure way to get the perspective of African leaders on this aid instrument (at least of the most vocal one). For our part, we will ensure that the Financing Health in Africa blog serves as a platform for African experts to share their views and observations on PBA; communities of practice can play a role in this drive for more accountability. The second proposal is to correctly identify what success looks like under PBA contracts. I would argue that the main test will not be whether PBA manages to curb the HIV/AIDS epidemic or maternal mortality (although these would be great feats of course). The real test for PBA will be whether such schemes consolidate country-owned agendas for accountability or whether they undermine them. In this respect, the way PBA relates to different reforms enhancing accountability in the health sector (see the list proposed by Donald Kaberuka) will be the key.